Thursday, September 6, 2012

Green Mountain (GMCR) surpasses key resistance

Shares of Green Mountain Coffee Roasters Inc (GMCR) are rallying strongly in today's (Thurs, Sept 6) exceptionally bullish overall market.

Catalyzing the broad market, in brief, is an announcement of new monetary easing by the European Central Bank; as of midday, S&P 500 futures are ahead by just under 2 percent.

The story in GMCR is not its rally per-se; rather, the stock has surpassed the resistance line of a key price channel on the hourly candles chart, which may fuel further price appreciation. The channel is robustly defined, connecting all major local maxima and minima since March, and was discussed by this blog on Aug 21. A line of the same slope also models support and resistance for a handful of candles from early May through late July. The last two weeks of price consolidation have, furthermore, occurred just below this channel resistance, giving the line further validity as a support / resistance model.

GMCR. Dec 19, 2011 to present. Hourly candles.
As long as price action stays above this channel (above approximately $24.5), the outlook for GMCR appears bullish. The next significant test for bulls will be the August high at $26.69.

GMCR. Aug 8 to present. 5-minute candles.